As tourism returns in 2021, hotels are focused on converting the pent-up demand for travel into reservations in an effort to recover their businesses. In doing so, many will be realigning strategies to meet both the desire for travel and the expectations of app-centric Millennials who are by far the most likely to book post-pandemic travel.
According to a Berkshire Hathaway study, more than 36% of millennials said they plan to travel in 2021. They will be joined by baby boomers and Gen Z travelers, who unlike many Millennials did not travel in 2020. To meet the challenge of technology friendly guests and an uptick in reservations, many independent hotel owners will have to up level their payments systems from legacy systems to SaaS based offerings.
In line with this evolution are companies like Cloudbeds, who recently launched a new payments product integrated within their cloud-based hospitality PMS product. These companies’ payments systems provide greater efficiencies for hotel owners, such as contactless payment and seamless accounting; they also provide financial services capabilities to owners and banks via embedded finance.
Embedded finance, or the enabling of non-financial services companies to provide banking services, will fuel growth in new ways. Embedded fintech is technology that enables embedded finance, into a financial institutions’ product sets, websites, mobile applications, and business processes via APIs by allowing banks access to a new customer base. As this continues, banks will find that partners are critical to their growth as they offer new channels to sell their products.
Cloud based payments systems also serve to support hotel growth during this rapid change from almost complete dormancy to fulfilled reservations. A recent study by Mastercard on European tourism, “Advancing a Brighter Future for Hotels Across Europe & Beyond”, delves into these ideas: the hotel landscape remains volatile, and the only way to deal with this instability is to act on the aspects that are under the control of the hotels.
This boils down to three priorities:
- A flexible value proposition, tailored to customer needs;
- Capturing the largest possible volume of future demand, managed with a secure, traceable payment and reservation systems, with a high level of automation that makes them more efficient;
- Fostering, through technology, a constructive and collaborative relationship with travel agencies and intermediaries throughout the industry that obtains the highest possible volume of revenue.
To meet the demands of travel in a reopening world, these payment systems should also include a state-of-the-art terminal, transparent fees, built-in reporting, analytics, security, and world-class (in-house) support so hoteliers can to focus on their guests rather than time-consuming payments acceptance and reconciliation. The better offerings also have an in-house dispute management team composed of industry experts who intimately understand the hospitality business to better support hoteliers and guests.
Further, cloud based payments systems are often integrated in Property Management Systems, (PMS) to…
- Better manage reservations
- Discover and seamlessly connect to 3rd party apps and services and a channel manager to sync rates, availability and details across 100s of channels
- Manage revenue by optimizing rates, tracking competitors, and providing insights & analytics,
- Connect to a booking engine to drive commission free bookings and the payment system, which alleviates manual credit card entry, lengthy verification processes and seamlessly rolls up accounting and tax preparation.
All of these provide hoteliers more time to focus on guests than administrative tasks as well as increase revenues.
As these PMS continue to evolve, they will conspire to create rich revenue streams for financial institutions as embedded finance becomes the new normal in our post pandemic world.